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Northwest towns eye billions in revenues from resource boom

Municipalities form alliance to negotiate revenue-sharing agreement with B.C. government

Officials in Kitimat say they need money to invest in infrastructure such as a deteriorating bridge that they fear cannot withstand increased heavy industrial traffic, and affordable housing as rents and house prices skyrocket with the influx of construction workers.

Photograph by: JONATHAN HAYWARD
, THE CANADIAN PRESS

Northwest B.C. municipal governments formed an alliance Tuesday to help negotiate for billions in potential revenues from an expected resource boom in their region.

The B.C. government is banking on projects to export liquefied natural gas (LNG) overseas to growing Asian markets to help fuel a so-called $100-billion prosperity fund in the next three decades.

A revenue share of only 3 per cent would generate $3 billion to invest in Northwest B.C. communities of the future, said the new alliance.

But there are other projects on the horizon as well, including gold, copper and molybdenum mines and the controversial $7.9-billion Northern Gateway oil pipeline recently given approval by Stephen Harper’s federal Conservative government.

Bruce Bidgood, the chair of the Regional District of Kitimat-Stikine, said they would like a share of all of these developments to help improve airports, roads, bridges, hospitals and social services to deal with the economic boom.

Because the North recently went through a decade of decline — where the forest industry shed jobs in the thousands — they simply don’t have the money for the needed upgrades, said Bidgood.

“We’re not asking for a handout, we want to be a partner with the province,” he said. “We don’t want to be an obstacle to this development happening … if the airport can’t handle the increased traffic, workers won’t be flying in here.”

The alliance communities of Terrace, Kitimat, Stewart, New Hazelton and the Village of Hazelton say they are already dealing with infrastructure deficits, including at the Terrace airport that needs upgrading to help deal with a massive increase in traffic related directly to the resource development.

Another complaint has been a deteriorating bridge in Kitimat that officials fear cannot withstand increased heavy industrial traffic.

There are also concerns about the need for affordable housing as rents and house prices skyrocket with the influx of construction workers.

Bidgood said an apartment that just a few years ago rented for $600 is now $1,400, and people on lower incomes are being forced out.

If LNG projects or the Northern Gateway pipeline are built, thousands of more construction workers will descend on the small communities in northwest B.C.

It’s not certain that all developments will be built, as companies such as Petronas, Shell and ExxonMobil have not made final investment decisions on their LNG projects, and Enbridge faces multiple lawsuits from First Nations against the Northern Gateway project.

But right now, even the price of building roads is increasing, said Bidgood.

When a call for bids was put out for a road project in Terrace expected to cost about $400,000, bids finally came in at nearly twice that because firms are already busy, he said.

And because many of the projects are happening on Crown land or outside the boundaries of the municipalities (and regional district have limited taxation authority), they have no way to increase revenues, Bidgood noted.

That’s why they need some form of revenue sharing with the province, which will be the main benefactor in increased money in their coffers, he said.

B.C. Premier Christy Clark met with northern municipal leaders last September during the Union of B.C. Municipalities annual convention to discuss their worries, and promise a revenue-sharing deal.

But on Tuesday, the province did not respond directly to a question on the subject.

“The Government of British Columbia is committed to ensuring B.C. communities realize the full potential of opportunities afforded by major industrial developments,” community ministry spokeswoman Shannon Hagerman said in a written statement.

The ministry pointed to Community Minister Coralee Oakes’s announcement in May of $1 million in grants to help Northwest communities update their bylaws and official community plans, as well as review their local infrastructure needs to prepare for LNG developments and other industrial expansion.

Revenue-sharing agreements with local governments are not unprecedented in B.C.

In 2005, the province established a “fair-share” agreement with communities in northeast B.C. to share tax revenues from the oil and gas sector.

The deal provides at least $20 million annually to the Peace River Regional District, which so far has collected nearly $220 million.

Also, the B.C. government has already signed revenue-sharing agreements with First Nations whose traditional territories are in the areas of LNG development.

In April, the Metlakatla and Lax Kw’alaams nations signed agreements with the province, over the proposed Aurora LNG development, that could be worth $15 million.

Officials in Kitimat say they need money to invest in infrastructure such as a deteriorating bridge that they fear cannot withstand increased heavy industrial traffic, and affordable housing as rents and house prices skyrocket with the influx of construction workers.

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